Anyone else get this email? Whiz Flix want me to give them free DVDs...

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Postby Tim Ellis » 03/17/09 07:24 PM

Dear Sir or Madam,

My name is Anthony Bly and I am the product buyer for a new video rental company called "WhizFlix" (www.whizflix.com). WhizFlix specializes in the rental of technical and instructional DVDs. The company was formed last year and is actively acquiring inventory in anticipation of a formal launch later this year.

As we research the rental and retail sales markets, we identify videos likely to succeed as profitable rentals. One or more of your videos meet our criteria, and that is the reason I am contacting you today.

As you may know, under federal copyright statutes a lawfully acquired copy of a video may be rented without permission from, or further payment to, its creator. While this is a source of irritation to many content creators, it is simply a matter of legally well-established fact. I will be happy to provide copies of the statutes in question and/or legal citations, but since the purpose of this letter is specifically to avoid contention, I will only do so upon your request.

As counterintuitive as it seems, we at WhizFlix believe that a healthy and robust rental market actually helps content creators. There are a number of reasons for this, but the primary one is that particularly on high-priced instructional videos, there is a segment of the market that simply is not willing to purchase the content. Rental is often a viable option in these cases, and if the content provider is paid royalties, he or she can profit from the transaction without also losing a sale (because the sale wouldn't have happened in any case).

Another significant factor is that some content remains completely unknown to most of the public until they stumble upon it on our web site or a similar one. Our research into competing businesses reveals that if they enjoy the content, consumers often purchase videos they rent - or gain enough trust in the quality of the producer that they purchase other titles sight-unseen.

In this difficult economic environment we, like many others, are attempting to reduce our costs and have decided to do so in way that is completely unheard of in the rental industry:

We would like you to provide us with copies of your DVDs, free of charge, in return for a percentage of the rental revenue they generate. We propose a revenue-splitting arrangement whereby you receive fifty percent (50%) of net revenues (net of costs directly associated with a rental, such as postage and expendables) until you have received five hundred percent (500%) of the full retail price of the video, after which you will receive royalties of twenty percent (20%) of the net revenues generated by your product. Again, this arrangement is unheard of in this industry and in fact, there are at least two rental companies renting your content right now without paying you anything at all beyond the original purchase price. If at any time you became unhappy with the arrangement you would, of course, be free to terminate it and receive your video(s) back with no further obligation on your part or ours.

It is our intention to eventually make your video(s) available for rental and we will do so whether we have to purchase them or not, but we see this as a way for us to minimize our cash outlays while providing you with an ongoing revenue stream from your product. Please feel free to contact me if you would like to discuss this further.

Best Regards,

Anthony Bly
WhizFlix, LLC
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Postby Ray T. Stott » 03/17/09 07:47 PM

It is our intention to eventually make your video(s) available for rental and we will do so whether we have to purchase them or not,...


The above statement is [color:#FF0000][size:14pt]extortion[/size][/color].
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Postby Richard Kaufman » 03/17/09 07:52 PM

Isn't this what they call a pyramid scheme?
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Postby JordanB » 03/17/09 07:58 PM

He's certainly trying to strong arm you.

What a *insert expletive here*stick. 50% of net revenues. How the hell is he going to figure that. He's just a d**che that doesn't have the cash to start up his own crappy business.
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Reason: Please stop using that damn word! It's rude.
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Postby NCMarsh » 03/17/09 08:11 PM

The idea of magic videos being available for rental to the general public concerns me, having folks make a fairly significant investment to learn the material ($20-40-more) serves -- admittedly imperfectly -- to direct the material toward those who have an active interest in becoming magicians, rather than to sate idle curiosity.

Obviously, there is more at stake for the folks creating and publishing this material.

Any ideas on keeping magic content off of this site?
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Postby Tim Ellis » 03/17/09 09:51 PM

I responded:

_____________________________

Anthony,

You do realise that all of those DVDs have 'Not For Rental' printed on the jacket as well as on the copyright warning on the front of them?

The reason we did that was because we don't want the DVDs to be rented.

Yes, you may have a legal ruling that says you can buy them and rent them even if the creator doesn't want you to.

Some people value friendships and relationships over dollars.

I would ask you not to rent our DVDs.

I hope you will respect my wishes.


TIM ELLIS

___________________________________________

His reply:


___________________________________________


Hello Mr. Ellis,

We know some DVDs do contain prohibitions against renting and we are equally aware of the general meaninglessness of such unilaterally-imposed conditions. The right to lend, sell, destroy, rent or otherwise dispose of property is a right that has existed for over 100 years so it shouldn't come as a surprise to anyone when it happens. It's not even a legal ruling: It is black-letter law. Those are "the rules" and everyone knows it going in.

We are also aware of a certain disdain for "unauthorized" DVD rentals in the "magic community" that interestingly, is peculiar to that community. Frankly, I don't really understand it because the content of all DVDs loses its value the second or third time you watch it and yes, many people who rent a DVD never go on to buy it. But I would be surprised if even the most vocal critics of DVD renting don't rent entertainment titles instead of buying them, depriving the movie studios of the revenue they demand for themselves. It seems more than a bit hypocritical...

That said, we have other areas (aside from magic) where we are concentrating our initial efforts and so will refrain from renting your DVDs for the time being. Perhaps we can revisit the issue at a later date with an arrangement you can accept. The final decision to include or exclude a title rests with the owner of the company, not me. I have spoken to him about this conversation and copied him on this email. With his permission (already given), I can promise that as a courtesy we will contact you again before proceeding with any rental plans with respect to your titles.

Best,

Anthony Bly
WhizFlix, LLC
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Postby Richard Kaufman » 03/17/09 09:59 PM

This will be harder and harder to fight off in coming years and, sad to say, the only way to avoid it is to simply not make any DVDs if you don't want people renting them and diluting the value of your product.
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Postby Tim Ellis » 03/17/09 10:05 PM

There's already two people on line offering rental of magic DVDs. No-one seems to have stopped them, which is pretty sad.

http://www.magicvideolibrary.com/ (based in Wangtah NY, call 516 826 3806 if anyone wants to find out who's running this one).

http://www.previewmagicdvds.com/ (there's been another big thread on this guy - he is using Murphy's images of DVDs on his site... is there some breach of copyright there?)
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Postby JordanB » 03/17/09 10:08 PM

Sorry about the "d" word Richard.

I don't know. The idea of this makes me angry...but not a whole lot I can do other than condemn it.

I would think that the start up costs for such a project would be huge for a small business owner...especially if you consider how much you would make in return.

I would also think that a lot of the people who would support "renting" a magic DVD are the same people/kids who would download illegal copies of them in the firstplace, and they wouldn't pay to "rent" them anyway.

Frankly, it just seems like a horrible business idea. His idea of splitting the revenues among the creators is a joke. Especially for something that would more than likely be a monthly subscription fee anyway.

And to compare it to renting a movie at Blockbuster...what a doofus.
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Postby Tim Ellis » 03/17/09 10:14 PM

There's an interesting discussion about the legalities of starting a video rental business here: http://entrepreneurs.about.com/b/2004/0 ... siness.htm
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Postby David Alexander » 03/17/09 11:23 PM

I don't believe Mr. Bly's business model will work if he's in competition with people who do not share revenue with the DVD's producers. He has an additional expense his competitors do not. That may prove to be a fatal flaw.

Second, I don't see a huge market in the general public renting magic DVDs in any great quantity just to learn "secrets." A lot of magic videos are boring unless you're interested in learning an effect. Is the Masked Idiot getting big numbers in the ratings when his crap is free? If people actually have to pay to rent the material, will they?

Blockbuster Video is not a company to reference. As of a couple of days ago their stock was trading at less than $1 a share. Blockbuster's overpaid management made two critical mistakes - one being not buying Netflix for $50 million when they had the chance. Blockbuster is about to go the way of the Passenger Pigeon and the Dodo. See: http://www.slate.com/id/2133995/
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Postby RV9Factory » 04/08/09 02:48 PM

I own a video rental business that operates in a niche market and while Googling for "WhizFlix" (a potential competitor), I found this site and thread.

I'm not going to get into the legalities and ethical issues surrounding the subject because as you can guess, I have opinions that likely differ from yours.

Really the only thing I wanted to point out was the irony in the fact that while renting out videos is perfectly legal, posting the full text of the guy's emails is not: it is a copyright violation!

So the only people who have violated any copyright laws are the guys who are most vocal about their rights. Wow!
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Postby Francesca Moffet » 04/08/09 03:39 PM

The company sounds like a bit of a scam to me. Renting out magic videos which are available to the general public is also exposure.

I have no idea if there is a legal loophole you could use to stop him but it would be worth investigating.
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Postby Kent Gunn » 04/08/09 04:13 PM

Francesa, et. al.

It's not a legal loophole you're looking for. You're looking for a couple of chunks of U.S. Copyright law.

Everything that one needs is, oddly enough on the .gov site.

http://www.copyright.gov/

Tim E. I am not conversant with Australian copyright law. For two cents, I can let you know how to copyright your works in the U.S. Please realize U.S. copyright law is very straightforward and you're more than smart enough to find the sections you'd need to file a suit, on your own behalf in the link above.

106. Exclusive rights in copyrighted works38
Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.



If some theiving ass mentions fair use, he's full of . . . well let's just say it doesn't apply to some rat renting videos you hold the copyright to.

The other chunk of U.S. code you should be aware of is here:

106. Exclusive rights in copyrighted works38
Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

Sorry for the length of the posting. I am quite certain the copyright holder can and should exercise his exclusive rights on renting his works. If one of these renters gets big enough to do any real damage, they'll have enough assets to make any shysters greedy hackles rise.

All in all it is expensive to chase copyright violaters. To sum up the dross above . . .

The scammer is not only devoid of morals, he doesn't know donk about copyright law either.

KG, esq.
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Postby Joe Pecore » 04/08/09 04:26 PM

http://en.wikipedia.org/wiki/First-sale_doctrine

The first-sale doctrine is a limitation on copyright that was recognized by the U.S. Supreme Court in 1908 and subsequently codified in the Copyright Act of 1976, 17 U.S.C. 109. The doctrine allows the purchaser to transfer (i.e., sell or give away) a particular lawfully made copy of the copyrighted work without permission once it has been obtained. That means that copyright holder's rights to control the change of ownership of a particular copy end once that copy is sold, as long as no additional copies are made. This doctrine is also referred to as the "first sale rule" or "exhaustion rule".

...
This right was underlined by the US courts in the case of NEBG v Weinstein, in which a film-industry defendant accepted that it had no right to restrict buyers of DVDs from renting them to third parties.

Copyright owners sometimes affix warning notices to packaged DVDs, or display notices on screen before showing the content, which purport to list uses of the DVD that are forbidden under copyright law. Such notices do not always fairly reflect the buyer's legal rights established by the first-sale doctrine.
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Postby RV9Factory » 04/08/09 04:28 PM

@Kent Gunn: I would submit that you "don't know donk" about copyright law. You conveniently quoted a section of law that said "subject to sections 107 thorugh 122..." but didn't bother to read those.

The exclusive right to rent held by the copyright owner only applies to musical recordings and software.

Books, videos, audiobooks and any other copyrighted item except music and software may be rented out by the owner of a particular copy:


109. Limitations on exclusive rights: Effect of transfer of particular copy or phonorecord

(a) Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord...

This section goes on to exempt software and musical recordings from the provisions of paragraph (a). But videos are fair game.
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Postby RV9Factory » 04/08/09 04:44 PM

Reading through this thread, I'm amazed that people who would rent a car, DVD, or any other object where royalties aren't paid to its manufacturer without a second thought would be so opposed to renting instructional DVDs - as though their product is somehow "special".

I agree that a lot of hard work goes into producing a DVD, but what makes a magic DVD different other than the size of the publisher?

In any case, given the strong code of ethics magicians seem to have, I would be surprised if professional magicians would ever rent a magic DVD, much less use a trick from one in a performance. I'll bet the people renting magic DVDs, to the extent they are even rented out, are kids and hobbyists.
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Postby NCMarsh » 04/08/09 05:21 PM

RV9Factory wrote:
109. Limitations on exclusive rights: Effect of transfer of particular copy or phonorecord

(a) Notwithstanding the provisions of section 106(3), the owner of a particular copy or phonorecord lawfully made under this title, or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord...

This section goes on to exempt software and musical recordings from the provisions of paragraph (a). But videos are fair game.


I'm not, thank God, an attorney. Can you explain how renting a particular copy is "disposing" of it? The section you quote, to my uneducated eye, sounds like it gives the owner of a particular copy the right to sell it or give it away.

all:

Is a lease/license -- rather than giving purchasers outright ownership of magic dvds -- a solution?

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Postby the Larry » 04/08/09 05:26 PM

Besides the legal discussion here, the business offer WhizFlix is making is one I would never take. The key problem in his offer is 'net revenue'. He offers to split 'net revenue'. Net revenue can be easily manipulated that the content owner sees nothing or very little. If we are talking 'revenue' meaning rental price times rental transactions (not net of anything), then it would sound a lot more interesting. Anybody who has worked in the content industry would never take a 'net' offer.

I say, let him buy the DVDs. I would even go so far as to sell him as many as you can. Because he will go under with his business. Any half decent magician would stay away from rental. So sell him as many as you can now before he is broke.
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Postby RV9Factory » 04/08/09 05:38 PM

NCMarsh wrote:Can you explain how renting a particular copy is "disposing" of it? The section you quote, to my uneducated eye, sounds like it gives the owner of a particular copy the right to sell it or give it away.



You need look no further than the dictionary definition of the word "dispose": To transfer to the control of another. It matters not that the transfer of control is temporary.

It is well settled that rental fits into that section of the law. It's not even debatable at this point.

NCMarsh wrote:Is a lease/license -- rather than giving purchasers outright ownership of magic dvds -- a solution?


No. The courts have ruled that if it looks like a sale and feels like a sale, then it's a sale. Basically a perpetual license with a single fee paid up front is a sale, no matter how the parties try characterize it.

Autodesk (makers of AutoCAD) had their butts handed to them when they tried to characterize their software as licensed, not sold. A guy was buying used copies and reselling them - they sued. The court said that since a bazillion dollars (actually more like a couple thousand) was transferred up front with no further fees, the copies of the software had been sold. The guy was free to resell them. But not rent, because software falls under the exception to the codified first-sale doctrine.
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Postby RV9Factory » 04/08/09 05:43 PM

@the Larry: He says "net of costs directly associated with a rental, such as postage and expendables" which sounds to me exactly as it reads. Not net of the cost of his dog's food, his wife's haircuts, etc... He could easily make it a percentage of gross sales and just adjust the percentage to account for the fixed per-rental costs.

That said, I wouldn't consider that for my own business. It's easier for us to just buy the videos. No accounting, no publishers questioning our numbers, etc. We recover the full retail price of our videos within 4-6 rentals and then it's pure profit with no sharing with anyone.
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Postby Joe Pecore » 04/08/09 06:24 PM

RV9Factory, is there a price for a DVD where it becomes cost prohibitive to rent them? (i.e. you would never be able to rent it enough times to make a profit)
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Postby Kent Gunn » 04/08/09 06:33 PM

RV9, I'm guessing you're a military kinda guy. If I'm wrong, please educate me.

I never said you didn't know donk about anything. Apparently you know donk. I notice you didn't respond to the morality crack.

We disagree on what should be legal with a DVD we've purchased. You think if someone sells you something: that it is yours to do with as you freakin' please. You're certain if injuctions were filed against you that you'd win in court. That is silly. It's always, always a crapshoot. Digital rights and what constitutes intellectual property is not clear in the federal code. You think it's clear, that doesn't mean a lawyer couldn't muddy it up. Why not establish a business relationship with those whose products you want to rent out? Then nobody goes to court!

If I buy something with a label on it that clearly states the producer of the video doesn't want me renting it though, I would not.

When an artist, craftsman or artist produces something they certainly should have an exclusive right to reproduce that item. What is morally right about running a business that negates the wishes of an artist/craftsman? For performance-related art, the recreation of the images on your renter's screens is copying the work. You're hiding under bad canon. You will, if you're successful and don't co-operate with the people creating things, disenfranchise your source of revenue. Cooperation will garner you more sucess than being an [censored] to people every time.

I don't think the law is completely clear on the issue. You're in business to rent videos and you believe in your model.

Morally speaking now, if the finest DVD on a topic your customers wanted to rent was produced by someone who told you explicitly they did not want to their videos rented out: would you still put them in your catalog?

Would you act as Mr. Bly did and tell Mr. Ellis they were going to rent his stuff out regardless of how he felt?

Joe, Pecore, I really don't think the rental issue is resolved for all things yet. What is a DVD? I know, I know it's splitting hairs, but that is what lawyers do. There's computer codes embedded in every DVD. It isn't an analog recording and somebody is going to have to resolve where a DVD fits into the federal code. I would avoid Wikipedia as a reference. The result of a single court case does not constitute law. It's one lousy precedent.

Just because you want to copy DVDs or rent them out doesn't mean it's legal. There are gray spots in the code. If you don't see some gray in the code, take off your sunglasses.
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Postby RV9Factory » 04/08/09 06:36 PM

@Joe: Yes and no.

There is not really an upper price because the higher the retail price, the more incentive there is for people to rent it and the higher the rental fee that can be charged. I suppose an insanely high price coupled on a no-demand video would be a loser, though.

There is, however, a lower limit. It isn't worth it to carry low cost DVDs and by low cost I mean < about $30. At prices that low, people would rather own than rent, unless the rental rate is very, very low.

The bottom line is that high-priced DVDs are great. People will pay $10 a pop all day long to rent $100 videos. Not so with $20 videos.

Does that answer your question?
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Postby RV9Factory » 04/08/09 06:52 PM

@Kent: Alas, you are correct. You said "scammer" and I read "me". I am renting videos so maybe that was Freudian.

I am actually not military, but curious as to why you mention it?

We can disagree on what should be legal but there should be no disagreement on what is legal. This has been the law in the U.S. for a hundred and one years. It has been litigated to the point that there is absolutely no question. It is so settled that any attorney who brought a suit might find himself on the wrong end of sanctions for filing a frivolous and/or harassing action unless he was able to demonstrate some new circumstance that justified filing suit.

I haven't had any issues with content producers. Not one has contacted me complaining.

You will, if you're successful and don't co-operate with the people creating things, disenfranchise your source of revenue. Cooperation will garner you more sucess than being an [censored] to people every time.


It sounds to me like the Whiz Flix guy was trying to cooperate and the posters here eviscerated him. ??

Morally speaking now, if the finest DVD on a topic your customers wanted to rent was produced by someone who told you explicitly they did not want to their videos rented out: would you still put them in your catalog?


It depends on the manner in which I was asked not to rent it. If I got a threat of legal action or other hostile communication I would immediately acquire copies on the used market and put them up for rent. Otherwise, I would try to work something out with the copyright owner. If that didn't work, I'm not sure, but I think I'd probably go ahead and rent it.
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Postby RV9Factory » 04/08/09 07:01 PM

Kent Gunn wrote:Just because you want to copy DVDs or rent them out doesn't mean it's legal. There are gray spots in the code. If you don't see some gray in the code, take off your sunglasses.


@Kent: FYI copying DVDs is VERY illegal.
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Postby Joe Pecore » 04/08/09 07:18 PM

RV9Factory wrote:The bottom line is that high-priced DVDs are great. People will pay $10 a pop all day long to rent $100 videos. Not so with $20 videos.

Does that answer your question?

Yes, thanks. Since there appears to be no legal way to stop the rental of a DVD, that was legally purchased, I was just wondering what could be done to make it financially not worth it.
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Postby RV9Factory » 04/08/09 07:23 PM

@Joe: Do you produce DVDs?
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Postby Kent Gunn » 04/08/09 07:28 PM

RV9 Dude,

I'm good. You good? I suspect we agree on many, many things.

RV9 is a way cool plane. Most pilots or people who would pick RV9 for a moniker are . . . ex-military pilots. It was a shot in the dark. I missed. This is a magic site, I was cold-reading.

You sound like a reasonable fellow. I apologize for pissing you off. I do that to folks a lot.

Seriously, though the NEBG lawsuit isn't all there is for precedent. Just because the EFF types want things to be reasonable doesn't mean those old fat white guys in D.C. won't enact some really, really awful laws.

I'm good.
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Postby Joe Pecore » 04/08/09 07:29 PM

@RV9Factory: No, just interested in how someone that does, could go about stopping rentals.
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Postby RV9Factory » 04/09/09 10:21 AM

@Kent: Ah, yes. I'm building an RV9.
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Postby the Larry » 04/09/09 11:03 AM

As a business man with a few decades under my belt I thought today driving in my car about how one could stop this magic DVD renting. The legal angles appeared to me futile. Maybe it is a way for lawyers to make a living, but in real practical terms it is not a viable avenue - unless you want to lobby for a change in the law :-)

However, from a business point of view there are answers. As Joe's question above and RV9's later answer, I came to the same conclusion. The best way to stop this upsetting magic DVD rental business is to make the DVDs cheaper. There is a lot of transaction cost for a rental business. Making DVDs cheaper will reduce their margins. On top of that making DVDs cheaper will make the incentive to rent them very low. Most will simply buy them rather then rent. So make those DVDs cheaper, $20 or $15 versus the $35 we typically see in magic. DVDs can today be produced for below $1. Or make them downloadable. Then you eliminate all the manufacturing and mailing cost, really undercutting the rental business.

If you break up DVDs in junks and offer them for downloading, one could easily offer those junks for $10 or less. This would eliminate the rental business. It would probably also make it illegal to copy these files on a disc and rent them out, which would give you a legal angle on top of the competitive advantage.
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Postby Jonathan Townsend » 04/09/09 11:26 AM

The Larry,

As you put it, junk, or more properly trivia made into gossip is perhaps not such a viable commodity in an environment where such spreads at just under the speed of light via the internet.

It's the latest, it's the greatest, it's been available to most for free since about an hour after it hit the market.

Any questions?

Here's a few old and obvious ones so we can spare ourselves some rehash time:

What about limited release windows? Sure - just limits the initial purchase market.

What about secure media? Sure - just look on YouTube for tutorials a few days later.

What about exclusivitiy in first sale? Sure - just limits the initial purchase market.

* onward

Okay - how about offering a product that includes some service so that's what folks would be willing to pay for and keep?
Last edited by Jonathan Townsend on 04/09/09 11:29 AM, edited 0 times in total.
Reason: It's all about branding AFTER you establish a quality product.
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Postby RV9Factory » 04/09/09 11:28 AM

$20 would make rental an absolute non-option. And yes, downloadable or streamed video would be illegal to copy to disc and rent.

What is a junk?
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Postby Tom Stone » 04/09/09 11:34 AM

RV9Factory wrote:The exclusive right to rent held by the copyright owner only applies to musical recordings and software.

Books, videos, audiobooks and any other copyrighted item except music and software may be rented out by the owner of a particular copy:

So, what would happen if one were to add an original piece of music, or some original software, to the "Extras"-folder of a DVD?
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Postby Jonathan Miller » 04/09/09 11:45 AM

the Larry wrote:The best way to stop this upsetting magic DVD rental business is to make the DVDs cheaper.


Which would also probably make less incentive for people to actually produce DVDs...
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Postby Jonathan Townsend » 04/09/09 11:47 AM

The traveling seminars thing seems to be doing pretty well with the relatively inexpensive lecture followed by the more costly tutorial for those who want help.
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Postby NCMarsh » 04/09/09 12:25 PM

DVDs can today be produced for below $1


Yes and no.

I have not produced DVDs for sale, but my experience with my demo DVD is that unit cost varies with volume. I did a quick search -- just for the purposes of this thread -- and the closest I could get to a $1/unit cost for a.) replication b.)disc printing c.) disc packaging and d.) disc packaging printing combined was 10,000 units for $12,000 or $1.20 per unit. (from OasisCD.com)

So, yes, it can be done for $1.20 per disc (and I'm sure there are less expensive sources you could research were you doing it)...but it means a $12,000 outlay just for materials -- and this is before spending on production, editing, design, marketing.

At a $20 price point, assuming that you're wholesaling at 50% (I don't know the actual numbers in this business), you have to sell 1,200 just to recoup that materials cost. Under the same assumptions, $35 has to sell 686 units to recoup the materials cost.

Because I work in very low quantities (compared to a commercial product), I pay $4 a unit for my demo dvds. My guess is that magic publishers are between the $1.20 and $4 on their unit cost, but that they have a threshold cost they have to cover before the per unit margin even comes into play.

In other words..If I sell 1,000 copies at $35/unit the temptation is to say that my profit (again excluding the really expensive work of producing, editing, and advertising) is $33,800 (number of sales * price per sale - material cost per sale)...but in reality my margin is $23,000...because the $1.20 "unit cost" is only my unit cost if I sell out the entire run I had to purchase to get the $1.20 unit rate.

I'm not saying that a $20 price point isn't viable -- I'm just saying that the actual margin calculation is more complicated because we are tight niche without mass-market sales...

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Postby Richard Kaufman » 04/09/09 12:35 PM

You can press DVDs for 50 cents.
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Postby NCMarsh » 04/09/09 12:43 PM

Including cases and inserts? Cool.
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